With gold prices tumbling to a five-year low, investors aren’t just getting out of gold, they’re betting against it.

Speculators in July amassed record short holdings in the metal, meaning they’re wagering that the price has further to fall. Also telling, the number of hedge funds that are hoping to profit from declines is near a record high.

Altegris Investments’ $513 million Futures Evolution Strategy Fund has increased its bets that gold will fall.

“The only place to be right now is short,” said Lara Magnusen, a La Jolla, California-based portfolio strategist at Altegris. “We’ve been in persistently downward price action for gold, but it’s been exacerbated, certainly, this year by a host of fundamental reasons.”

It’s been a painful two years for gold bulls, who by the end of 2012 had accumulated a record position after piling into gold exchange-traded funds and similar investments backed by the metal. Since then more than $84 billion has been erased from the funds’ value, and their assets have dropped to the lowest level since March 2009.

After drifting lower for most of 2015, prices plunged in July, dropping every week this month. Gold futures for August delivery rose 0.5 percent to $1,096.90 an ounce on the Comex on Thursday. The price touched $1,080 on Monday, the lowest since February 2010, and is down 16 percent in the past 12 months.

Higher Rates

One factor in the decline was Federal Reserve Chair Janet Yellen confirming that the U.S. central bank will raise interest rates this year. Higher rates can draw investors toward bonds and away from gold. The prospect of higher rates is also boosting the dollar, and a strong dollar tends to keep a lid on inflation, which also diminishes gold’s appeal as a hedge against rising prices.

The low prices have yet to spur more buying in Asia, where Indian brides and Chinese aunties -- as middle-aged matriarchs are respectfully known -- are usually avid consumers.

The collapse in gold prices is part of a general commodities slump. And adding to the metal’s woes, prices for everything from copper to oil to sugar are in a meltdown that’s signaling inflation will probably stay subdued. The Bloomberg Commodity Index dropped to a 13-year low on July 22.

Unlike other commodities, gold typically benefits from uncertainty in the world economy. Yet neither the Greek bailout negotiations nor the Chinese stock rout that erased $4 trillion in wealth spurred investors to seek shelter in gold.

‘Opportunity Cost’

“A lot of people have held gold as insurance or as a hedge against geopolitical risk, and we found that trade seems less effective over the last few years,” said Jim Tassoni, chief investment officer at Regal Investment Advisors in Kentwood, Michigan. “Gold has no dividends and no yield, and that presents a lot of opportunity cost,” because the money invested in it could be more profitably deployed elsewhere.

Some die-hard gold fans are using the recent slump as an opportunity to add to holdings. Sales of American Eagle coins at the U.S. Mint in July are heading for the biggest monthly total since April 2013, when prices first fell into a bear market. Demand has also increased at the Royal Canadian Mint.

“Without question, there is going to be an opportunity down at these levels for people to be buying,” said Jeff Sica, who oversees $1.5 billion as president and chief executive officer of Circle Squared Alternative Investments in Morristown, New Jersey. “People will be looking at gold to hedge against the havoc. If prices fall further we will add,” he said. The fund has a “small” long position in the metal, he said.

Analyst Outlook

Analysts predict more losses. Oversea-Chinese Banking Corp.’s Barnabas Gan, the most accurate forecaster of precious metals in rankings compiled by Bloomberg, predicts gold will reach $1,050 by December. ABN Amro Bank NV’s Georgette Boele and Robin Bhar of Societe Generale AG say bullion will approach $1,000 by December. Goldman Sachs Group Inc.’s Jeffrey Currie says the metal could fall below that level this year for the first time since 2009.

As prices slide, mining stocks are also suffering. Shares of Canada’s Barrick Gold, the world’s largest producer, dropped to its lowest price since 1990 in Toronto on July 22.

“I started adding to the gold short position in January and February, and I’d like to increase it,” said John Stephenson, the chief executive officer of Stephenson & Co. Capital Management in Toronto. “Gold tends to have a very weak fundamental trend because it’s mainly held for psychological reasons.” He said that if the gold price recovers a bit, he’ll increase his bets against it.